Gender equality mainstreaming for business growth and impact
Women are key drivers of economic growth, engaging in business as consumers, employees, leaders, suppliers and community stakeholders. Yet, women are frequently overlooked and underrepresented in the private sector throughout the world.
2017 marked the first year that the World Economic Forum’s Global Gender Gap – an index measuring 144 countries’ gender disparity in health, education, politics and the workplace – worsened since its inception in 2006 (WEF). The COVID-19 pandemic has disproportionately affected women around the world, both in the workplace and at home: before the pandemic, women did approximately three times as much unpaid care and domestic work as men, and this has increased with school closures and overstretched healthcare systems (UN Women, 2020). In many parts of the world, more women than men are losing their livelihoods and have fewer alternatives to earn an income (UN Women, 2020). As vaccines are rolled out globally, there is an opportunity to rebuild economies more equitably.
This is good news, since $28 trillion could be added to annual global GDP by 2025 if women participated in the economy at the same level as men (McKinsey, 2015).
The number of gender-specific business opportunities available to companies is virtually limitless. For example, companies are designing products to address women’s needs, such as through the introduction of female crash test dummies in automaker’s safety tests (Medium, 2015).
Businesses with at least one female board member generate compound excess returns of 3.5% per annum, as compared to companies with no women on the board (Credit Suisse, 2016). However, female founders receive a paltry USD $1.46 billion compared to $58.2 billion for all-male founder teams (Fortune, 2017) despite the fact that venture capital funds like First Round Capital find female founders’ companies outperform their male counterparts by 63% (HBR, 2017). Managers who choose to ignore gender as a material factor for business growth do so at their own risk.
MEDA has been at the forefront of integrating gender equality and women’s empowerment with innovation in private sector development. From pioneering the development of the microfinance industry to originating breakthrough business service models for women in fragile states, MEDA seeks to empower women in private sectors around the world.
Businesses and investors who seek to understand and respond to the barriers women face will be rewarded – both in terms of growth and impact.
The GEM Framework
The Gender Equality Mainstreaming (GEM) Framework is a practical manual and toolkit for assessing gender equality, and identifying, implementing and measuring gender equality mainstreaming strategies within companies. The framework builds upon the environmental, social and governance (ESG) investment standard by mainstreaming gender across ESG criteria. This alignment with the ESG investment standard promotes adoption in an industry that is increasingly ESG-compliant.
Designed for organizations seeking financial and impact returns through investing or providing support to companies, the manual is applicable to a wide range of investors (e.g. private equity funds, government donors, foundations) and capacity builders (e.g. accelerators, technical assistance providers, NGOs).
The ultimate aim of the framework is to transform companies to be more gender equitable while supporting business growth and impact.
Piloting and scaling the GEM Framework
From pioneering the development of the microfinance industry to originating breakthrough business service models for women in fragile states, MEDA has been at the forefront of integrating gender equality and women’s empowerment with innovation in private sector development.
The GEM Framework, funded by USAID, was designed for and tested on Sarona Asset Management’s investments – that is, local private equity funds and their portfolio companies in emerging and frontier markets. Participating companies reported better analysis of the positive relationship between financial performance and gender, and expect to achieve business outcomes as a result of implementing gender mainstreaming strategies.
Since its launch in 2018, MEDA has engaged over 50 companies including seven investment funds to apply the GEM Framework, and immediate results from intensive GEM technical assistance with four companies point to improved gender equality outcomes for close to 3,000 women and men. The toolkit has been adapted for use in different countries and languages by MEDA staff and projects across Africa, Asia, Latin America and the Middle East. MEDA continues to learn from these various adaptations and build on the original Framework to include an increased focus on social inclusion and technical assistance with respect to action planning and implementation of gender mainstreaming activities within company operations. An online self-assessment tool was also piloted for companies and is available for MEDA projects and private sector partners.
Numerous industry leaders have announced their support for the GEM Framework and toolkit. From gender lens investing pioneers like Jackie VanderBrug to private equity funds including Women’s World Banking and SEAF to government agencies like USAID, the framework is rapidly gaining traction with investors and capacity building organizations.
Questions or comments?
Farah Chandani, Sr. Project Manager
Ashlea Webber, Project Manager